High grain prices ... there's good news, and bad news

Corn prices have been holding above $5 a bushel, and soybeans topped $13 a bushel Thursday on the Chicago Mercantile Exchange. The prices are record-setting highs for both commodities, according to the Exchange.

The numbers might be good for grain producers, but for the livestock industry, it means having to cut herd size, shut down until prices drop or just plain operate at a loss, Wayne County OSU Extension educator Diane Shoemaker said.

"There are factors that are non-farm related that are driving up prices, be it the ethanol credit, the strength of the dollar or speculation on how much grain China will be buying," Shoemaker said. "It is impacting folks in (Holmes and Wayne counties) in ways never thought possible."

The increase in prices directly relates to the livestock and dairy farmer's bottom line. Their options are few and mostly bad for business, Shoemaker said.

It could lead livestock finishers to cut down the size of their herds or sit things out until prices drop -- fewer mouths to feed. For dairy farmers and breeders, however, who can't cut herd size, it mostly means a looming loss, Shoemaker said.

Grain producers who also have feedlots may decide to leave the lot empty and market their grain directly, rather than translating grain profits through livestock.

"Feed and finish operators have the opportunity to get in and out," Shoemaker said. "People with breeding and dairy operations do not. They always have mouths to feed."

Ron Becker, Wayne County OSU Extension program coordinator, said the only producers who might get around the bite are those who forward contract on feed and those who bought early and keep stores of grain, rather than buy month-to-month. Those who store have additional expense in caring for the feed, however.

"You have the cost in storage (units) if you don't store it yourself, and then you've got the potential for insects and mold," Becker said.

Shoemaker said she doesn't see prices affecting the consumer in the short term. If high prices continue over the long term, the effects might be seen in the grocery aisle, Shoemaker said.

Reporter Nick Sabo can be reached at 330-287-1643 or e-mail nsabo@the-daily-record.com.